26/11/2024 - HP Inc.: HP Inc. Earnings Announcement Q4FY24 - Presentation

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Earnings

Announcement

November 26, 2024 | Q4 FY24

Use of Non-GAAP Financial Information

HP has included non-GAAP financial measures in this presentation to supplement HP's consolidated financial statements presented on a generally accepted accounting principles ("GAAP") basis. Definitions of these non-GAAP financial measures and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included elsewhere in this presentation. HP's management uses net revenue on a constant currency basis, non-GAAP total operating expenses, non-GAAP operating profit, non-GAAP operating margin, non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings, non-GAAP diluted net earnings per share, and other non-GAAP financial measures to evaluate and forecast HP's performance before gains, losses or other charges that are considered by HP's management to be outside of HP's core business segment operating results. Gross cash, net cash (debt), and free cash flow are liquidity measures that provide useful information to management about the amount of cash available for investment in HP's businesses, funding acquisitions, repurchasing stock and other purposes. Net cash (debt) provides useful information to management about the state of HP's consolidated balance sheet.

These and the other non-GAAP financial measures that HP uses may have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of HP's results as reported under GAAP. For example, items such as amortization of intangible assets, though not directly affecting HP's cash position, represent the loss in value of intangible assets over time. Amortization of intangible assets, restructuring and other charges and acquisition and divestiture charges are not included in non-GAAP operating expenses, non-GAAP operating profit, non-GAAP operating margin, non-GAAP tax rate, non-GAAP net earnings, and non-GAAP diluted net earnings per share and therefore does not reflect the full economic effect of the change in value of those intangible assets. In addition, non-operating retirement-related (credits)/charges, debt extinguishment costs (benefits) and tax adjustments are excluded from non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings and non-GAAP diluted net EPS. These items can have a material impact on the equivalent GAAP earnings measure and cash flows. HP may not be able to immediately liquidate the short-term and long-term investments included in gross cash, which may limit the usefulness of gross cash as a liquidity measure. In addition, free cash flow, which includes cash provided by (used in) operating activities adjusted for net investment in leases from integrated financing and net property, plant, and equipment, does not represent the total increase or decrease in cash for the period. The non-GAAP financial information that we provide also may differ from the non-GAAP information provided by other companies. We account for the limitations on our use of these non-GAAP financial measures by relying primarily on our GAAP financial statements and using non-GAAP financial measures only supplementally. We also provide reconciliations of each non-GAAP financial measure to the most directly comparable GAAP measure, and we encourage investors to review those reconciliations carefully.

We believe that providing these non-GAAP financial measures in addition to the related GAAP measures provides investors with greater insight to the information used by HP's management in its financial and operational decision- making and allows investors to see HP's results "through the eyes" of management. We further believe that providing this information better enables investors to understand HP's operating performance and financial condition and to evaluate the efficacy of the methodology and information used by HP's management to evaluate and measure such performance and financial condition.

HP's Investor Relations website at https://investor.hp.com contains a significant amount of information about HP, including financial and other information for investors. HP encourages investors to visit its website from time to time, as information is updated and new information is posted.

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Q4 FY24 Highlights

• Net revenue of $14.1 billion, up 2% from the prior-year period and up 2% in constant currency1
• Non-GAAPdiluted net earnings per share2 of $0.93, within the previously provided outlook of $0.89 to $0.99 per share
• GAAP diluted net earnings per share of $0.93, above the previously provided outlook of $0.74 to $0.84 per share
• Free cash flow of $1.5 billion2,3
• Returned $1.2 billion to shareholders in the form of share repurchases and dividends

FY24 Highlights

• Net revenue of $53.6 billion, down 0.3% from the prior-year period and down 0.2% in constant currency1
• Non-GAAPdiluted net earnings per share2 of $3.38, within the previously provided outlook of $3.35 to $3.45 per share
• GAAP diluted net earnings per share of $2.81, above the previously provided outlook of $2.62 to $2.72 per share
• Free cash flow of $3.3 billion2,3
• Returned $3.2 billion to shareholders in the form of share repurchases and dividends

1. Adjusted to exclude the effect of foreign currency exchange fluctuations calculated by translating current period revenues using monthly exchange rates from the comparative period and excluding any hedging impact recognized in the current period
2. A reconciliation of specific adjustments to GAAP results for the current and prior periods is included on slide 21 and in the GAAP to non-GAAP slides that appear as part of the supplemental slides of this presentation. A description of HP's use of non-GAAP information is provided on slide 3 5 under "Use of non-GAAP financial information"
3. Free cash flow includes net cash provided by operating activities of $3.7 billion adjusted for net investment in leases from integrated financing of $165 million and net investment in property, plant and equipment of $592 million. See slide 27 for a reconciliation of Free Cash Flow

Q4 FY24 Results Overview

FY24 Results Overview

1. CC = constant currency; adjusted to exclude the effect of foreign currency exchange fluctuations calculated by translating current period revenues using monthly average exchange rates from the comparative period and excluding any hedging impact recognized in the current period 2. Not meaningful

3. A reconciliation of specific adjustments to GAAP results for the current period is included on slide 21 and in the GAAP to non-GAAP slides that appear as part of the supplemental slides of this presentation. A description of HP's use of non-GAAP information is provided on slide 3 under "Use 7 of non-GAAP financial information"

Q4 FY24 Mix by Segment and Region

FY24 Mix by Segment and Region

1. Revenue mix calculated based on total key segment revenue, which does not include corporate investments and other
2. A reconciliation of specific adjustments to GAAP results for the current period is included on slide 21 and in the GAAP to non-GAAP slides that appear as part of the supplemental slides of this presentation. A description of HP's use of non-GAAP information is provided on slide 3 under "Use of non-GAAP financial information"
3. Operating profit mix calculated based on total key segment operating profit, which does not include corporate investments and other
4. CC = constant currency; adjusted to exclude the effect of foreign currency exchange fluctuations calculated by translating current period revenues using monthly exchange rates from the comparative period and excluding any hedging impact recognized in the current period